Remember the stock market bubble? With everything that's happened since 2000, it feels like ancient history. But a few pessimists, notably Stephen Roach of Morgan Stanley, argue that we have not yet paid the price for our past excesses.

I've never fully accepted that view. But looking at the housing market, I'm starting to reconsider.

In July 2001, Paul McCulley, an economist at Pimco, the giant bond fund, predicted that the Federal Reserve would simply replace one bubble with another. "There is room," he wrote, "for the Fed to create a bubble in housing prices, if necessary, to sustain American hedonism. And I think the Fed has the will to do so, even though political correctness would demand that Mr. Greenspan deny any such thing................

Re: Running Out of Bubbles (What happens when the housing bubble pops?)

Prices will stablize and instade of selling your house in 2 years to make a profit, it will take you about 5 or 6 years until you make a profit. For prices to go down, we would have to lose about 25 to 50 of our population. Hence the less demand for housing would cause housing prices to fall. Otherwise prices will not come down.